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They burned the Monte Carlo ... and may get away with it
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They burned the Monte Carlo ... and may get away with it
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If you, like me, had hoped for a breather from bad news today, you hoped in vain. In no particular order ...
Faced with a collapsing state budget and a scorched-earth set of spending cuts proposed by Gov. Jim Gibbons, do state Democrats take an Obama-like, "Hard choices are upon us" stance? You're kidding me, right? No, they're seeking refuge in weaselly evasions that they can't make specific proposals because they don't know the exact number that they have to hit.
Will they take on the mining industry or propose the gross-receipts tax on non-casino businesses for which J. Terrence Lanni used to stump? Nope. Even though sales taxes are by nature regressive and both they and gaming revenue are spiraling downward, 60% of the state's eggs will continue to be put into that fraying basket. (The best analogy for this budgetary formula is that of CityLife's Steve Sebelius, who likens it to building a house on the slope of an active volcano.)
The rest of the non-solution, as propounded by Ways & Means chair Morse "Moose" Arberry (D) consists of More Of The Same: Just jack up each existing tax a teensy bit and maybe nobody will notice -- or at least squawk too loudly. The rationale, as explained by one budgetary sage, is that everybody takes it in the shorts (basically), sparing legislators from having to confront one or two particular interest groups. It also means that the increased -- they hope -- revenue starts rolling in on Jan. 1, 2010 ... whereupon the larger issue of Nevada's revenue structure can be safely palmed off on the 2011 Lege, absolving the current bunch of responsibility. Yup, sounds like a real winner.
So Nevadans and tourists alike can brace themselves for higher taxes on: alcohol, tobacco, live entertainment, insurance premiums, property transfers -- and casino revenues. Not to mention the hotel-room tax that's already sailing through. Heck, it seems the gambling industry dodged a credit-chilling acceleration of the tax on markers largely because Midnight Jim went off half-cocked. Gibbons' characteristic ineptitude is rarely a cause for relief but here's an exception to the rule.
As for the Buckley/Arberry proposition that the people who are already paying (you, me, the guy behind the tree) should pay more while the ones who aren't will continue to skate ... to say that it's disgraceful, inequitable and it stinks would be a gross understatement. It's a sad day when Jim Gibbons is your local Profile in Courage but there you have it.
J. Terrence Who? The unfortunate Mr. Lanni was a no-show at his Nevada Business Hall of Fame induction. Maybe, just maybe he's keeping a low profile because MGM Mirage is cracking under the strain of debt that was run up on his watch. Then again, this is a town that has no compunction about giving sentimental awards to mobbed-up old casino execs. But fudge one resumé and you're a non-person, buddy.
More 401-ks stopped. This time it's the Goldman Sachs-owned Stratosphere and both Arizona Charlie's, etc. Gosh sakes, yes, let's raise gaming taxes right this minute.
If a Strip casino were to close, the odds-on favorite would be the Riviera. It has shuttered all but one of its restaurants and has got to be worrying that a rumored six-month postponement of Fontainebleau could be the kiss of death. If that weren't enough, Wachovia Bank has decided to give the Riv a shove under the bus by insisting that -- according to Riviera Holdings President William Westerman (via PR Newswire) -- "Wachovia could gain access to all cash held in Riviera's bank accounts by merely advising the banks of a notice of default without first allowing us the opportunity to cure the default, no matter how trivial."
He adds that Wachovia's alleged brinksmanship has been going on since last Oct. 14. What luck: Of all the banks willing to help prop up the casino industry, Westerman has to deal with the one that decides to play hardball instead. When you consider that people were writing Westerman off 10 years ago, he's no stranger to facing long odds.
Ready for some good news? Cash-parched MGM Mirage is close to gaining some desperately needed liquidity now that the Nevada Gaming Control Board has OK'd Phil Ruffin's purchase of Treasure Island. Ruffin has enjoyed excellent luck with Nevada regulators. Like his New Frontier acquisition, this one went through like greased lightning. An exhaustive LVA profile of Ruffin found him always to be on the up and up. And unlike James Packer, he doesn't plan to fix what isn't broken.